The probe is focused on suspected breaches of obligations, particularly related to posts following Hamas' attacks on Israel.
The DSA, implemented in November last year, imposes stringent rules on user privacy, content moderation, and transparency for major digital platforms and search engines. Violating firms could face fines up to six per cent of their global turnover.
Digital Commissioner Thierry Breton outlined the alleged infringements in a post on X, citing suspicions of breaches in the company's handling of illegal content and disinformation.
The investigation focuses on the effectiveness of measures X took to counter the dissemination of illegal content in the EU and measures to combat information manipulation. These include X's "Community Notes" feature, allowing users to comment on posts to flag false or misleading content, and engaging users in crowd-sourcing fact-checking efforts.
An investigation into "deceptive design" will focus on the controversial use of "blue check" marks, now only available to those who pay, raising concerns about the platform's commitment to transparency.
Critics of X, especially since the Hamas attack on Israel on 7th October, have condemned the presence of hate speech and fake news on the platform.
Thierry Breton had previously warned X, Meta, and TikTok in mid-October to remain vigilant over disinformation and violent posts concerning the Israel-Hamas conflict. He reminded the platforms that penalties could be imposed if they were found to be non-compliant with the DSA.
Concerns have also been raised about X's lack of investment in compliance and content moderation in European languages, with reports suggesting the social notworking site has only one moderator in the Netherlands.
A senior EU official clarified to Reuters that the investigation doesn't presume X guilty of an infringement but signifies substantial grounds for a detailed examination.
Facebook, TikTok, Google and Microsoft committed to a code of conduct outlined by the EU in preparation for the DSA but X withdrew from the code of conduct in June, prompting warnings from Thierry Breton.
X's CEO, Elon Musk, took to the platform to question Thierry Breton, asking if similar actions were being taken against other social media platforms.
"Because if you have those issues with this platform, and none are perfect, the others are much worse," he added without naming names or citing any proof.
According to EU officials, even if X decides to withdraw services from the EU, the legal action would still apply.